VENEZUELA DOUBTS OPEC NUMBERS

Oil experts around the world have long disputed the accuracy of OPEC accounting. In the past, OPEC’s mickeying with production and reserve figures only affected the price of oil at the edge of cold war politics because everybody thought they knew who had the oil and how much they had. Now OPEC numbers dramatically impact world events.

How much oil OPEC allocates for Venezuelan production could determine how much influence Hugo Chavez can exert on the world stage and especially in Latin America. It could determine whether China, India and Japan go to Venezuela or Brazil for their oil. It could determine how much about world oil supply will be settled in Latin America and how much will be settled in Africa.

The important question: Why is OPEC at odds with Venezuela? Could it be they don’t like playing with Chavez?

Venezuela officials take issue with OPEC figures
Eric Watkins, September 27, 2007 (Oil & Gas Journal)

WHO
Venezuelan Oil Minister Rafael Ramirez, Venezuelan FinanceVice-Minister Carlos Ramones, the Organization of Petroleum Exporting Countries (OPEC), International Energy Agency (IEA)

Hugo Chavez asks: What's wrong with this picture? (click to enlarge)

WHAT
OPEC’s website reduces Venezuela’s production quote to 2.47 million barrels/day (bpd), a reduction of 750.000 bpd. Oil Minister Ramirez disputed the accuracy of the allocation and termed OPEC’s figures “confusion and manipulation.”

WHEN
The 2.47 million bpd allocation is for November. Venezuela’s September production quota was 3.22 million bpd.

WHERE
Ramirez claims Venezuela should have 11.5% of OPEC’s total output but these figures represent only 9% of it.

WHY
- OPEC total output is 27.25 million bpd.
- Other OPEC members have disputed production quotas. Many resort to untruthful reporting and black market oil production/trading.
- Independent oil analysts and organizations (including the IEA) validate OPEC’s numbers, putting Venezuelan output at 2.4 million bpd.

Numbers, like prognostications, vary from year to year and depend a lot on who's doing the counting -- and why. (click to enlarge)

QUOTES
- FinanceVice-Minister Ramones: "You can't reduce that many barrels to the quota [ceiling.] This will be reviewed because we have to set an oil production level for the [2008] budget…"
- Watkins, O&GJ: “The OPEC figures also might come as an embarrassment to Venezuelan President Hugo Chavez, who as recently as Sept. 16 announced plans to increase his country's oil production to 5 million b/d in 2012 from the current 3.2 million b/d…